South Korea: perceived EV purchase incentives 2024

The main incentive for South Korean consumers to purchase an electric car were the availability of tax rebates and subsidies on electric car purchases, according to a survey conducted by Rakuten Insight in January 2024. This was the top incentive and chosen by over 72 percent of all respondents. Another 44 percent replied that the presence of charging stations near their homes and workplaces would motivate them to buy an electric car. Other top incentives chosen by the respondents were also related to benefits for driving an electric car, such as other subsidies, or special parking or lanes.

Growth of green vehicles

As of 2023, there were more than two million hybrid, electric, or hydrogen cars registered with the authorities in South Korea. More than 54 thousand of those were electric cars. Although the absolute numbers of these environmentally friendly are small compared to the number of coventional cars that burn gasoline or diesel as fuel, the share of green cars has increased steadily over the years. There were less than 1,500 electric cars registered in 2013, but the number of registered electric cars has increased since then.

Why consumers choose electric cars

There are two primary drivers that are pushing the transition to these so-called green cars. One is the changing public perception of environmental issues, which is highlighted by the harmful particulate matter originating from China and polluted Korea's skies. This is known as “fine dust” among the public. Additionally, global warming and the increasingly hotter summers of the past several years are issues igniting greater public interest and concern regarding the environment. At the same time, the South Korean government is implementing various policies to stimulate the domestic market for electric cars and other green vehicles. Since most electric cars remain pricier than traditional automobiles, subsidies of up to 6.8 million South Korean won are provided to customers purchasing electric vehicles. This does not even count the separate subsidies and financial benefits that cities and provinces are providing to their residents who choose to drive electric cars. Moreover, the public and private sector are working to improve the number of electric charging stations in the country.